Five years ago this week, a chaih of events was set in motion that added up to one of the economic watersheds of the modern era - the initiation of the Arab oil embargo against the industrialized West and the tandern five-fold increase in oil prices by the Organization of Petroleum Exporting Countries that followed it.

In its wake came a deep, worldwide recession and an upheaval in the balance of world power between oil producers and consumers as OPEC, at a stroke, demonstrated it held the power to strangle the economic well-being of the Western World by the way it priced and supplied its oil.

The events of 1973 also had important effects on the big oil internationals - Exxon, Mobil, Texaco, Gulf, Standard Oil of California, British Petroleum and Royal Dutch/Shell - the so-called "Seven Sisters" which for half a century had dominated most aspects of the giobal oil business from drilling to shipping to refining to marketing.

For these beg companies operating in the OPEC countries, the developments five years ago signaled the end of their role as enterpreneurial investors with an equity interest in the oil they pumped, and turned them instead into service companies for the OPEC nations.

Takeovers have been accomplished in Kuwait, Venexuela and most of the OPEC countries. The Saudi Arabian takeover of Aramco - the most important of all - is not completed, thought it largely has been negotiated. U.S. government sources indicate the Saudisare delaying signing because of deep internal disagreements on oil policy that would have to be faced once the agreement takes effect.

However, the four Aramco companies - Exxon, Mobil, Socal and Texaco - are operating as if the agreement is in place. But they are becoming a little impatient to see their $2 billion payment.

After the events of 1973, a number of observers predicted that this could be the beginning of the end for the "Seven Sisters."

But despite the forecasts, as Royal Dutch/ Shell Managing Director R. M. Hart put it recently, in a paraphrase of Mark Twain, "The reports of our death were greatly exaggerated."

The seven big internationals still operate, compete and cooperate on a worldwide basis that is only slightly less deminant that it was five years ago.

Last year, they accounted for $209 billion in revenues, nearly four times the $55.3 billion registered in the preembargo year of 1972.

Their combined profits of $3.2 billion last year nearly doubled the 1972 total of $4.4 billion, but fell short of the record $9.3 billion registered in the post-embargo year of 2974, when a one-shot windfall of inventory profits greatly fattened earnings statements.

The companies still account for nearly 40 percent of the oil that moves in world commerce. And the sharply escalating costs of exploring for oil offshore and in otherwise difficult terrain have made these well-capitalized companies better able to undertake these ventures than their smaller competitors.

Return on investment capital for the seven companies varies widely. But for most of them, it stands above the levels they achieved in the pre-embargo years. However, in 1977, only one of them - Royal Dutch/Shell - at 15.6 percent exceeded 14 percent, the average return on capital recorded by U.S. industry as a whole.

The companies as a group, with the possible exception of Texaco, have maintained a bountiful cash flow that has provided them with the means to largely finance their own massive capital programs internally - an achievement few other industries can boast of.

"We don't see the cash-flow problems the industry cries about, nor do we see the excessive profits earned by them that the public seems to perceive." said Lawrence Goldstein, senjor economist with the Petroleum Industry Research Foundation, a private group unaffiliated with the industry.

But although the overall financial health of the industry is not something to worry about, each company has fared very differently in the brave new postembargo world of oil that has produced something akin to revolution in the way the managements of the companies must view their integrated operations.

As Lazard Freres partner James Glanville, a close observer of the energy scene, put it: "It is mistake to view the oil business as some amorphous mass, moving together. These companies are as different as night and day, with their different successes and philosophies."

And interviews with the top management of the seven companies does reveal a wide range of strategies, pre-occupations and track records.

But there are common threads. All of them complain about the increasing intrusion of government into their business - not only in the United States, but around the world. The oil industry remains the only major segment of the U.S. economy still under price controls. And that isn't likely to change for some time. While chafing at the controls, the companies also seem resigned to it.

Diversification has been pursued by several of the oil companies. Mobil has acted most boldly, buying Marcor with its Montgomery Ward and Container Corp. of America units.

"It's very fair to state that the impact of 1973 and the results of that, when looked at from the viewpoint of the reactions we got from the American public and the Congress, led us to conclude that the concept of diversification we developed in 1968 was doubly important after 1973," said Mobil chairman Rawleigh Warner.

"At one point there were 3,000 bills in the hopper in the Congress, all of them aimed directly at doing something dreadful to the oil industry," he added. "So we said, if we're going to believe these people, we'd better move out into a different direction."

While none of the bills to break up the big oil companies or to hinder their right to expand vertically or horizontally has passed, the companies remain very wary of Washington's trust busters.

Last week John Shenefield, the assistant attorney general for antitrust in the Justice Department, warned that his agency would take a hard line on evaluating large-scale merger proposals. And that same day the antitrust division filed a civil suit to block a proposed $1 billion offer by Occidental Petroleum for the Mead Corp, a paper company.

While oil executives see many of their troubles coming from Washington, they also have faced serious problems resulting from the integrated way in which their companies are structured.

Prior to the massive oil price rises and the OPEC nationalizations, nearly all of the petroleum profits of these mega-enterprises came in exploration and production - or what oilmea call "upstream" operations.

It's hard to get a clear answer when even the experts debate whether these companies ever made any profits at all from their "downstream" or refining and marketing operations.

But as integrated companies, they maintained vast refining complexes and chains of service stations to utilize their crude oil, which was the principal way in which they earned their money.

The shocks of 1973 made the upstream operations far less of a bonanza. The profit margins on liftings in the Persian Gulf area in late 1973 prior to the changes in ownership status were roughly 35 cents a barrel. Today they range from 15 cents a barrel or less in Iran to a range of 21 to 25 cents in Saudi Arabia. And that must be discounted for inflation.

Meanwhile, losses in marketing and refining operations became more glaring, causing many of the companies "to cut back from the geographic spread of their operations, deliberately moving out of marketing in many parts of the U.S. and abroad, and out of refining as well," according to Joseph Tovey, an investment banker with Tovey Co. who specializes in the oil industry.

The situation was probably worst for Texaco, a large producer that had built up a far-flung 50-state network of service stations to market the oil it was producing, and numerous small refineries to supply the stations.

Texaco, which once had the highest return on investment of the big companies under the old regime, seemed to have been caught larely unprepared by the embargo, the price rise and its consequences. And, as a result, it has had to do some painful restructuring of its operations recently.

"We had a philosophy or policy which we espoused for many, many years which was balanced producing, refining and marketing," said Texaco Chairman Maurice Granville. "And that was our pride - we looked at our company as one that profited by it as few others were able to do.

"But had we been more clairvoyant, we would have been more mindful of the potential future concerns of having to have profitable downsteam operations," he added. "I suppose our company was quite exposed in that regard when things happened."

Not all domestic operations have been unprofitable. The government's complex system of price controls, which the oil executives inevitably rail at, ironically has helped to bolster the profitability of at least some of the companies' domestic U.S. refineries.

Meanwhile, the companies are taking a bath on refining in Europe. Refineries are said to be running about 65 percent of capacity. Many plants come on stream after 1973, having been planned earlier in a period when continued high growth rates for energy use were expected, and ran smack into the super-slow growth that followed the sharp increase in oil price.

The same is true for the once-profitable shipping divisions of the oil giants, which now have on hand fleets of tankers with tonnage far beyond actual needs.

That leaves exploration and production in non-OPEC areas. As a result of the sharp increase in worldwide oil prices, the rewards for new discoveries are that much greater these days. At the same time, the cost of exploring in difficult offshore regions like the North Sea has dramatically raised the price of producing each new barrel of oil that is discovered.

Oilmen continually remind you how much it costs to explore these days. One offshore drilling platform can cost more than $1 billion. And it takes an estimated capital expenditure of $7,000 to $10,000 in the North Sea to add a barrel of production capacity compared with an expenditure of only $100 in the Middle East to add the same barrel of production.

Most of Socal's strikes have been in the U.S. and in Canada where it is one of the major operators in the promising W. Pembine Area. And there has been a dramatic increase in Socal's North American production in the past five years, to the point where it now accounts for more than half of its total output.

The two major oil-producing areas that have come into production since 1973 are the North Sea and the Gulf of Alaska, and they were both discovered prior to the events of the embargo year.

As for Mexico - which is the major discovery of the recent period and whose oil reserves some wild guesstimates place as high as 200 billion barrels, or larger than all the reservoirs of Saudi Arabia - it nationalized its oil industry several years ago, and the big oil internationals therefore are not involved in exploration there.

Exxon Chairman Clifford Garvin believes his company and others might have found more oil and gas since 1973 if the U.S government had been more aggressive in its offshore leasing program. Money hasn't been the limiting factor in exploration, said Garvin. The limiting factor has been the amount of geological opportunities and the U.S government's limitation on acreage for exploration.

The record of actual offshore exploration during this period, however, has been spotty, with major disappointments for Exxon off the coast of Florida where it spent $500 million, and disappointments for other companies off the coast of California and in the Gulf of Alaska.

The initial gas strike by Texaco in the Baltimore Canyon area is still merely a straw in the wind as to whether the area off the Eastern seaboard of the United States contains substantial amounts of oil and gas.

On a worldwide basis, however, the pace of new exploration has not appeared to keep up with the increases in prices.

"Despite abundant rhetoric," notes Drexel Vurnham Lambert; oil analyst Joe Fischer, the steep increase in oil and gas prices since 1973 has not elicited a commensurate increase in efforts to locate and to develop new energy sources, conventional or nonconventional. The United States, Canada, Norway, Malaysia and Britain afford notable but strongly qualified exceptions."

OPEC, with its nationalized oil companies, has "not been drawn to commit its own vastly increased revenues to exploration risks or to developing nonconventional fuels," adds Fischer. "It is ironic that most of the new production sharing and service contract arrangements in OPEC nations and in other developing areas find the private oil companies still bearing dry hole risk."